Shake-up at Sibanye on the cards
JOHANNESBURG – Sibanye-Stillwater is set to undergo an organisational review that would affect its management structure after the Competition Tribunal last week gave the group's multibillion-rand takeover of platinum producer Lonmin the green light.
Sibanye-Stillwater chief executive Neal Froneman said the new structure would involve the reconfiguration of its management teams to focus on the gold and platinum group metals (PGM) divisions.
Froneman said the restructuring formed part of Sibanye's strategy to ensure the successful integration of Lonmin into the group. He said this would however not mean Sibanye would neglect its gold operations.
The tribunal last week approved the acquisition subject to a moratorium on retrenchments at the Lonmin operations for six months. However, the conditions excluded any voluntary separation agreements and ordinary course of business terminations.
Froneman said he believed the conditions were reasonable and in the best interests of all stakeholders.
“We are confident that the integration of Lonmin's PGM assets and Sibanye-Stillwater's adjacent PGM operations, will ensure a more sustainable and positive future for these assets and bring greater stability to the region,” Froneman said.
Last year, Sibanye said it would cut 12 600 jobs over the next three years as reserves at its older shafts were running out. The world's third platinum producer said it had not been able to invest in new projects which would have absorbed the employees.
Froneman said a further 890 jobs would be lost following the merger.
He believed cutting jobs was in the national interest and would save 20 000 jobs.
“Should the PGM market improve, we will invest in projects at Lonmin. It is a bitter medicine,” he said. “The bitter part is losing jobs, healthy part is getting it healthy.
Sibanye would become the biggest global primary platinum producer.
“We will employ nearly 100 000 people. We are the biggest employer outside of the government, which is a significant responsibility.
“In our view the platinum price is still depressed despite the fact that Sibanye-Stillwater's earnings are currently 85 percent from PGMs.”
Froneman said Sibanye recognised that there would be no major uptick in platinum demand in the near future.
“What we have started to see is a tightening in the market,” he said. “we expect Platinum prices to trade at about $850 to $900 an ounce for another year to 18 months.”
Froneman said palladium was moving to a more significant deficit.
He said Sibanye's forecast was that more platinum would be substituted for palladium in the catalytic converters (due to the rising price of palladium) within the next two years, adding that this would increase platinum demand and result in a price recovery.
Froneman, however, warned that energy shortages and lack of a regulatory framework could see South Africa losing its place as top platinum producer to Zimbabwe. “Zimbabwe ore bodies are much shallower and they are impacted less by labour issues.”
Sibanye-Stillwater shares closed 1.91 percent lower on the JSE yesterday at R8.75.